Over-the-Top (OTT) Services And Their Regulation In Kenya: Examining The Legal Challenges Posed By Whatsapp, Netflix, And Other Platforms

By Jer­ameel Kevins Owuor Odhi­ambo

Worth Not­ing:

• The reg­u­la­to­ry chal­lenges sur­round­ing OTT ser­vices in Kenya stem from their unique oper­a­tional char­ac­ter­is­tics and the bor­der­less nature of dig­i­tal plat­forms. The Com­mu­ni­ca­tions Author­i­ty of Kenya faces dif­fi­cul­ties in imple­ment­ing tra­di­tion­al licens­ing frame­works for OTT ser­vices that oper­ate glob­al­ly with­out phys­i­cal pres­ence in the coun­try.
• Reg­u­la­to­ry bod­ies strug­gle to enforce local con­tent stan­dards and data pro­tec­tion require­ments on plat­forms that store and process data in mul­ti­ple juris­dic­tions. The absence of clear guide­lines for qual­i­ty of ser­vice met­rics spe­cif­ic to OTT plat­forms cre­ates uncer­tain­ty in con­sumer pro­tec­tion mech­a­nisms.
• Tech­ni­cal chal­lenges in mon­i­tor­ing and mea­sur­ing OTT ser­vice per­for­mance have ham­pered effec­tive over­sight and enforce­ment.

Kenya’s telecom­mu­ni­ca­tions sec­tor has wit­nessed unprece­dent­ed growth in Over-the-Top (OTT) ser­vices, with approx­i­mate­ly 27.2 mil­lion active inter­net users access­ing these plat­forms dai­ly. Sta­tis­tics from the Com­mu­ni­ca­tions Author­i­ty of Kenya indi­cate that OTT ser­vices account for over 60% of Kenya’s mobile inter­net traf­fic as of 2024. What­sApp alone boasts over 12 mil­lion active users in Kenya, while Net­flix has seen a 200% growth in sub­scrip­tions since its entry into the mar­ket. Tra­di­tion­al tele­com oper­a­tors have report­ed a sig­nif­i­cant decline in voice and SMS rev­enues, with some esti­mat­ing loss­es of up to 30% due to OTT ser­vices.

The reg­u­la­to­ry frame­work gov­ern­ing these ser­vices remains frag­ment­ed, cre­at­ing chal­lenges for both ser­vice providers and con­sumers. Cur­rent leg­is­la­tion, includ­ing the Kenya Infor­ma­tion and Com­mu­ni­ca­tions Act, was pri­mar­i­ly designed for tra­di­tion­al telecom­mu­ni­ca­tions ser­vices and strug­gles to address the com­plex­i­ties of OTT plat­forms. Sev­er­al attempts to reg­u­late these ser­vices have faced resis­tance from var­i­ous stake­hold­ers, cit­ing con­cerns about inter­net free­dom and dig­i­tal inno­va­tion. The Com­pe­ti­tion Author­i­ty of Kenya has ini­ti­at­ed inves­ti­ga­tions into the mar­ket dom­i­nance of cer­tain OTT plat­forms, rais­ing ques­tions about fair com­pe­ti­tion and con­sumer pro­tec­tion.

The reg­u­la­to­ry chal­lenges sur­round­ing OTT ser­vices in Kenya stem from their unique oper­a­tional char­ac­ter­is­tics and the bor­der­less nature of dig­i­tal plat­forms. The Com­mu­ni­ca­tions Author­i­ty of Kenya faces dif­fi­cul­ties in imple­ment­ing tra­di­tion­al licens­ing frame­works for OTT ser­vices that oper­ate glob­al­ly with­out phys­i­cal pres­ence in the coun­try. Reg­u­la­to­ry bod­ies strug­gle to enforce local con­tent stan­dards and data pro­tec­tion require­ments on plat­forms that store and process data in mul­ti­ple juris­dic­tions. The absence of clear guide­lines for qual­i­ty of ser­vice met­rics spe­cif­ic to OTT plat­forms cre­ates uncer­tain­ty in con­sumer pro­tec­tion mech­a­nisms.

Tech­ni­cal chal­lenges in mon­i­tor­ing and mea­sur­ing OTT ser­vice per­for­mance have ham­pered effec­tive over­sight and enforce­ment. The cross-bor­der nature of these ser­vices com­pli­cates tax col­lec­tion and rev­enue attri­bu­tion, lead­ing to sig­nif­i­cant loss­es in poten­tial gov­ern­ment rev­enue. Legal frame­works for con­tent mod­er­a­tion and hate speech pre­ven­tion on OTT plat­forms remain inad­e­quate and poor­ly enforced. Ques­tions about juris­dic­tion and lia­bil­i­ty in cas­es of cyber-crimes com­mit­ted through these plat­forms per­sist with­out clear res­o­lu­tion. The rapid evo­lu­tion of OTT tech­nol­o­gy often out­paces reg­u­la­to­ry respons­es, cre­at­ing gaps in con­sumer pro­tec­tion.

The impact of OTT ser­vices on tra­di­tion­al telecom­mu­ni­ca­tions oper­a­tors has cre­at­ed com­plex eco­nom­ic and reg­u­la­to­ry con­sid­er­a­tions. Tra­di­tion­al tel­cos argue for a lev­el play­ing field, cit­ing their sub­stan­tial invest­ments in infra­struc­ture that OTT ser­vices uti­lize with­out com­pa­ra­ble reg­u­la­to­ry oblig­a­tions. Rev­enue shar­ing mod­els between net­work oper­a­tors and OTT ser­vice providers remain con­tentious and large­ly unreg­u­lat­ed. The shift in con­sumer behav­ior towards OTT ser­vices has forced tra­di­tion­al oper­a­tors to reassess their busi­ness mod­els and invest­ment strate­gies. Net­work neu­tral­i­ty prin­ci­ples clash with attempts to reg­u­late OTT traf­fic dif­fer­ent­ly from oth­er inter­net traf­fic. Infra­struc­ture devel­op­ment costs con­tin­ue to rise while aver­age rev­enue per user decreas­es due to OTT com­pe­ti­tion. Tra­di­tion­al oper­a­tors face chal­lenges in main­tain­ing net­work qual­i­ty while man­ag­ing increased data traf­fic from OTT ser­vices. The reg­u­la­to­ry frame­work strug­gles to bal­ance inno­va­tion with fair com­pe­ti­tion and sus­tain­able infra­struc­ture devel­op­ment. Mar­ket dynam­ics have shift­ed dra­mat­i­cal­ly, requir­ing new approach­es to spec­trum allo­ca­tion and licens­ing fees.

Data pro­tec­tion and pri­va­cy con­cerns rep­re­sent sig­nif­i­cant chal­lenges in reg­u­lat­ing OTT ser­vices with­in Kenya’s legal frame­work. The imple­men­ta­tion of Kenya’s Data Pro­tec­tion Act faces prac­ti­cal chal­lenges when applied to glob­al OTT plat­forms. Cross-bor­der data flows and stor­age loca­tions cre­ate juris­dic­tion­al com­plex­i­ties in enforc­ing pri­va­cy reg­u­la­tions. OTT ser­vices often col­lect vast amounts of user data with­out clear over­sight or account­abil­i­ty mech­a­nisms. The lack of stan­dard­ized data pro­tec­tion pro­to­cols across dif­fer­ent OTT plat­forms com­pli­cates reg­u­la­to­ry enforce­ment. Users often remain unaware of how their per­son­al infor­ma­tion is col­lect­ed, processed, and shared by OTT ser­vices. The right to be for­got­ten and data porta­bil­i­ty prin­ci­ples face imple­men­ta­tion chal­lenges in the OTT con­text. Cyber­se­cu­ri­ty threats tar­get­ing OTT plat­forms pose sig­nif­i­cant risks to user pri­va­cy and data pro­tec­tion. Ques­tions about gov­ern­ment access to OTT data and sur­veil­lance capa­bil­i­ties remain con­tentious issues. Stan­dards for encryp­tion and data secu­ri­ty vary wide­ly among dif­fer­ent OTT ser­vices.

Con­sumer pro­tec­tion emerges as a crit­i­cal con­cern in the reg­u­la­tion of OTT ser­vices in Kenya’s dig­i­tal mar­ket­place. Ser­vice qual­i­ty met­rics tra­di­tion­al­ly used for telecom­mu­ni­ca­tions ser­vices prove inad­e­quate for eval­u­at­ing OTT plat­form per­for­mance. Dis­pute res­o­lu­tion mech­a­nisms for OTT ser­vice-relat­ed com­plaints lack clear pro­ce­dures and enforce­ment capa­bil­i­ties. Con­sumer edu­ca­tion about dig­i­tal rights and respon­si­bil­i­ties remains insuf­fi­cient in the con­text of OTT ser­vices. Pric­ing trans­paren­cy and sub­scrip­tion man­age­ment prac­tices vary wide­ly among dif­fer­ent plat­forms with­out stan­dard­ized require­ments. The abil­i­ty to port data or main­tain ser­vice con­ti­nu­ity when switch­ing between OTT providers remains lim­it­ed. Con­sumer recourse in cas­es of ser­vice inter­rup­tion or qual­i­ty degra­da­tion lacks clear legal frame­works. The pro­lif­er­a­tion of fake news and harm­ful con­tent on OTT plat­forms pos­es sig­nif­i­cant chal­lenges to con­sumer pro­tec­tion. Dig­i­tal lit­er­a­cy gaps affect con­sumers’ abil­i­ty to make informed choic­es about OTT ser­vices. Age ver­i­fi­ca­tion and con­tent rat­ing sys­tems lack con­sis­ten­cy across dif­fer­ent plat­forms.

Com­pe­ti­tion law con­sid­er­a­tions play a cru­cial role in shap­ing the reg­u­la­to­ry approach to OTT ser­vices in Kenya. Mar­ket dom­i­nance assess­ment cri­te­ria designed for tra­di­tion­al indus­tries strug­gle to cap­ture the net­work effects and data advan­tages of OTT plat­forms. The def­i­n­i­tion of rel­e­vant mar­kets becomes increas­ing­ly com­plex as OTT ser­vices blur tra­di­tion­al indus­try bound­aries. Merg­er con­trol and acqui­si­tion reviews face chal­lenges in eval­u­at­ing the com­pet­i­tive impact of OTT ser­vice com­bi­na­tions. The poten­tial for abuse of mar­ket pow­er through data monop­o­lies requires new reg­u­la­to­ry approach­es. Tra­di­tion­al com­pe­ti­tion met­rics fail to account for zero-price ser­vices and mul­ti-sided plat­form dynam­ics. The role of data as a com­pet­i­tive asset intro­duces new con­sid­er­a­tions in mar­ket analy­sis. Anti-com­pet­i­tive prac­tices in the dig­i­tal space often man­i­fest dif­fer­ent­ly from tra­di­tion­al mar­kets. The glob­al nature of OTT plat­forms com­pli­cates local com­pe­ti­tion enforce­ment efforts.

Con­tent reg­u­la­tion presents unique chal­lenges in the con­text of OTT ser­vices oper­at­ing in Kenya’s dig­i­tal ecosys­tem. Tra­di­tion­al broad­cast­ing stan­dards prove dif­fi­cult to apply to on-demand and user-gen­er­at­ed con­tent on OTT plat­forms. Con­tent clas­si­fi­ca­tion and age-appro­pri­ate restric­tions face imple­men­ta­tion chal­lenges across dif­fer­ent OTT ser­vices. The bal­ance between free­dom of expres­sion and con­tent mod­er­a­tion remains con­tentious in the dig­i­tal space. Local con­tent require­ments designed for tra­di­tion­al media strug­gle to adapt to OTT plat­forms. Con­tent lia­bil­i­ty and respon­si­bil­i­ty allo­ca­tion between plat­form providers and con­tent cre­ators lack clear legal frame­works. Cul­tur­al sen­si­tiv­i­ty and com­mu­ni­ty stan­dards vary wide­ly among dif­fer­ent user groups. The speed of con­tent dis­tri­b­u­tion on OTT plat­forms out­paces tra­di­tion­al con­tent review mech­a­nisms. Cross-bor­der con­tent flows com­pli­cate the enforce­ment of local con­tent reg­u­la­tions.

Finan­cial reg­u­la­tion and tax­a­tion of OTT ser­vices require inno­v­a­tive approach­es with­in Kenya’s legal frame­work. Tra­di­tion­al rev­enue recog­ni­tion mod­els strug­gle to cap­ture the val­ue cre­at­ed by OTT ser­vices in the dig­i­tal econ­o­my. Tax col­lec­tion mech­a­nisms face chal­lenges in address­ing the vir­tu­al nature of OTT ser­vice deliv­ery. The deter­mi­na­tion of tax­able pres­ence and per­ma­nent estab­lish­ment con­cepts needs revi­sion for dig­i­tal ser­vices. Trans­fer pric­ing reg­u­la­tions require adap­ta­tion to address val­ue cre­ation in dig­i­tal busi­ness mod­els. The imple­men­ta­tion of dig­i­tal ser­vice tax­es faces prac­ti­cal chal­lenges in enforce­ment and com­pli­ance. Rev­enue attri­bu­tion meth­ods for cross-bor­der OTT ser­vices remain con­tentious. Finan­cial report­ing require­ments need mod­i­fi­ca­tion to cap­ture OTT busi­ness oper­a­tions effec­tive­ly. The impact of tax­a­tion on dig­i­tal inno­va­tion and mar­ket growth requires care­ful con­sid­er­a­tion.

Infra­struc­ture devel­op­ment and net­work man­age­ment con­sid­er­a­tions sig­nif­i­cant­ly influ­ence OTT ser­vice reg­u­la­tion in Kenya. Net­work capac­i­ty plan­ning must account for grow­ing OTT traf­fic with­out clear rev­enue shar­ing mech­a­nisms. Qual­i­ty of ser­vice guar­an­tees become com­plex when deal­ing with OTT ser­vices run­ning over mul­ti­ple net­works. Infra­struc­ture shar­ing and access reg­u­la­tions need updat­ing to address OTT ser­vice require­ments. The allo­ca­tion of spec­trum and net­work resources faces new chal­lenges with increas­ing OTT demand. Net­work neu­tral­i­ty prin­ci­ples affect the abil­i­ty to man­age OTT traf­fic effec­tive­ly. Infra­struc­ture invest­ment incen­tives require bal­anc­ing with OTT ser­vice growth. Tech­ni­cal stan­dards for OTT ser­vice deliv­ery lack stan­dard­iza­tion across dif­fer­ent plat­forms. The rela­tion­ship between net­work oper­a­tors and OTT providers needs clear reg­u­la­to­ry frame­works.

The way for­ward requires a bal­anced and inno­v­a­tive approach to reg­u­lat­ing OTT ser­vices in Kenya’s dig­i­tal econ­o­my. Reg­u­la­to­ry frame­works must evolve to address the unique char­ac­ter­is­tics of OTT ser­vices while pro­mot­ing inno­va­tion and com­pe­ti­tion. Col­lab­o­ra­tion between dif­fer­ent reg­u­la­to­ry author­i­ties becomes cru­cial in address­ing cross-cut­ting issues in OTT reg­u­la­tion. Stake­hold­er engage­ment and pub­lic con­sul­ta­tion process­es need strength­en­ing to ensure effec­tive reg­u­la­tion. Tech­nol­o­gy-neu­tral approach­es to reg­u­la­tion can help future-proof the legal frame­work. Inter­na­tion­al coop­er­a­tion becomes essen­tial in address­ing cross-bor­der aspects of OTT ser­vice reg­u­la­tion. Capac­i­ty build­ing with­in reg­u­la­to­ry author­i­ties must keep pace with tech­no­log­i­cal advance­ment. The devel­op­ment of stan­dard­ized met­rics and eval­u­a­tion cri­te­ria for OTT ser­vices requires pri­or­i­ty atten­tion. Reg­u­lar review and updates of reg­u­la­to­ry frame­works become nec­es­sary to address emerg­ing chal­lenges.

The writer is a legal scriven­er